Country Analysis of India: Economic and Investment Overview

This report provides a comprehensive country analysis of India, focusing on its emergence as a significant global market and the factors driving its growth. The analysis utilizes a PESTLE framework to examine the political, economic, social, and technological influences shaping India's business environment. It delves into the country's economic overview, including GDP growth, sector contributions, and the impact of factors like political stability and technological advancements. The report highlights India's competitive advantages, such as its natural resources, labor force, and entrepreneurial spirit. Furthermore, it explores the dynamics of foreign currency exchange, trade policies, barriers, and incentive policies within India, along with an assessment of the existing levels of Foreign Direct Investment (FDI). The study concludes with a summary of key findings and recommendations aimed at fostering further investment and economic expansion in India. The report emphasizes India's potential as an emerging market, supported by its resources and favorable policies.

COUNTRY ANALYSIS

EXECUTIVE SUMMARY
The study is based on country analysis where pestle analysis helped in deriving influence
of political economic social and technological factors India which is considered as emerging
market of increasing investment opportunities. Further the report outline exists foreign direct
investment and exchange rate and polices. Thus, it discussed about exchange management
objectives of India are focused on maintaining appropriate level of reserves with the motive of
maintaining stability in EXIM policies.
Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
SECTION 1: INTRODUCTION.....................................................................................................1
SECTION 2 MAIN BODY..............................................................................................................1
Overview of India........................................................................................................................1
Influence and benefits of factors of PEST...................................................................................1
Endowed factors and national resources which creates competitive advantage..........................2
Foreign currency and influence of exchange...............................................................................3
Trade policies barriers, system and incentive policies in India...................................................4
Existing level of Foreign Direct Investment................................................................................4
Summary and recommendation...................................................................................................5
SECTION 3: CONCLUSION..........................................................................................................6
REFERENCES................................................................................................................................7

SECTION 1: INTRODUCTION
Country analysis play a crucial role in deriving past, present and future condition of
region which is essential part of growth and development. The present assessment will outline
analysis of India as it one the emerging market where rapid GDP growth has created attractive
investment
opportunities for the international business. The study will outline influence of political., social,
technological and economic factors in boosting growth and environment of India. Thus, it will
discuss about foreign direct investment and trade and incentive policies of India.
SECTION 2 MAIN BODY
Overview of India
India is one of the emerging marking of globe with vast South Asian Country. Indian
economy is developing mixed economy and is sixth largest economy with regard to Gross
Domestic Product. The country is considered as fastest emerging service sector in world with
annual growth rate which is above 9 % for 2001. Annual growth rate has contributed in GDP by
7 % in 2012- 13 (Hopewell, 2015). However, the main source of Indian economy and its
emergence agriculture sector which creates more than 50% job opportunities. In accordance with
job creation agriculture sector it is demonstrated that majority of Indians are in support of growth
and development of agriculture sector.
Influence and benefits of factors of PEST
Political, economical, social and technological factors are most influential factors f
economy which supports growth and contribution in environment of country. The improvement
in technological and societal factors and stability in political and economic condition are
remarkable factors which make it as one of the emerging market of world. The discussion of
includes and benefits of PEST factors is given below:
 Political: Political condition of India is stable and is recognised as federal republic
democracy. The country enjoys the largest democracy and stable environment in
comparison of other developing countries like, Turkey, Russia, China. Apart from this, it
on the powerful countries in comparison to Bhutan, Sri Lanka, Bangladesh, Myanmar,
etc. Further, the most tolerable and growing advantage of India is attractive foreign direct
investment which has increased business expansion opportunities and enabled growth
opportunities or the country.
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 Economical: As per International monetary fund of 2017, it is recognised that gross
domestic product of India is 2.4 trillion $ because of which it is considered ad 7th largest
economy of globe. The GDP of India is continuously growing and now it is remarked at
7 %. In accordance with economic forecast it is determined that still there is scope of
increase in GDP by.4% (Hoekman and Shepherd, 2017). Apart from this, as per
economic graph of February 2018, corporate tax rate of country is 30 %. The increase
gross domestic product and concession in taxes is another influential factor which is
promoting international investment opportunities in India.
 Social: India is known for large market for consumers because of its population which
was recorded at 1.2 billion. The influence of consumer market denotes increasing
multinational companies which is supportive to foreign investment and therefore the
country is considered a one the largest emerging market of world. Further, the most
advantageous factors of increasing investment opportunities is availability of cheap
labour which predicts increase in workforce of India by 160 to 170 million by 2020. On
the other hand, social factor of India present it as multi lingual, ethnic and religious
country of world.
 Technological: The growth of India is driven by technology and is marked as 3rd most
advanced country of world with regard to technology, invention and innovation. Increase
in technology and its use is another factor which boosted investment opportunities. The
best example of increasing investment in India is involvement of Tech giants with
country like, Microsoft, Facebook and apple. In addition, country offers wide range of
opportunities to Start-ups and IT planners by assisting with skilled IT forces.
Endowed factors and national resources which creates competitive advantage
The increasing growth of service, manufacturing and agriculture sector of India has
enabled wide range of opportunities for increasing import and export, currency exchange and
international business expansion. Endowment factor comprise, land, labour, entrepreneurship
and capital of country. However, natural resources comprise coal, natural gases, iron,
manganese, ore, etc. India own biggest competitive advantage over its endowed factors and
natural resources (Tiewsoh, Sivek and Jirásek, 2017). Like, India has 4th largest Coal reserves
in comparison to all countries across world. Further, the country has 7th largest reserves of Ore,
Iron and Manganese. In addition, India owns 5th largest reserves for Bauxite. Thus, the natural
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resources and there reserves in India assist the country in standing out in competition and
attaining advantage over emerging markets of globe. In addition, India produces 87 minerals
which comprise non metallic, metallic and atomic resources. In accordance with this, it is
identified that the reserves and natural resources of country promotes export which has increased
investment opportunities in country.
India is remarked as second largest employer in comparison to China with 487 million
workers. Endowment factors denotes that labour of India is cheap but perishable. Also, the
country supports' growth of star ups and entrepreneurial ideas which is another effective factors
which has considered India on the graph of Emerging market because the millennials of country
are supportive of technological, invention and innovation which drives attention of international
business. Thus, it can be said that natural resources of the country are the factor which boost
experiment and currency exchange where endowment factors supports economic social and
technological growth of India. These are common in influential factors which are assist India in
attaining competitive advantage.
Foreign currency and influence of exchange
Balance of payment is the influential macro factor which is related to foreign exchange
rate. Exchange rate is a value of domestic country which is in reference to international
currency. Current exchange rate of India is 71. 6550 per $1 which is very high value and nots
increasing return on invest of internation companies and investors. As per the views of Sridhar
and et.al., 2016 it is identified that foreign exchange in India is increasing because of software
exports which has boomed stock market of India. Further, the author discussed bout may 2013,
when FII withdraw capital form debt market which increased investment of US dollar.
Foreign exchange rate of India has witnessed periods of stability and intense volatility
since 2013. However, development of Forex market denotes increase investment opportunities in
India because of stability in currency. The market of rupee is recorded with forex market
intervention and strict regulation of monetary regulations. The Reserve Bank of India made net
sales of US$ 10.8 billion in market of forex in 2013 May-August (Indian Foreign Exchange
Market: Recent developments and the road ahead, 2014). The RBI intervened in the forward
market which resulted in doubling of net forward liabilities to US$ 9.1 billion in August 2013 at
end from US$ 4.7 billion in July 2013. The speculation denotes positive change in economic
stability because of which India is considered as emerging investment market of international
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business. Stability of Rupee in comparison of emerging market countries like, South Africa,
Turkey, China, Russia, etc. In this scholar stated example of 2013 where exchange rate of rupee
remained same in comparison of 5.9 % fluctuation in currency of south Africa, 10.8 % in
Brazilian real (Indian Foreign Exchange Market: Recent developments and the road ahead,
2014).
Trade policies barriers, system and incentive policies in India
Trade polices are Export and Import policy of India which ensure flow of good and
services across international borders with the motive of increasing consumer base, market share,
current exchange and increasing in internal investment. According to Pradhan, 2017, India has
basic trading principles like, peaceful and panchsheel co existence which aim mutual respect for
exchange countries with regard to sovereignty and integrity. Further, the principles comprise no
aggression or violence, no interference in internal affair for countries and peaceful co existence.
According to Ghai, 2016, India is considered as part of heavy tariffs with more than 200
quantitative restriction on internal investment. The authors discussed about crucial aspect of
EXIM policy of India that is, duty free exports for the promoting of capital goods. Further, it
flows of standard quality products and technical modernisation by upgrading trends of Indian
industry. The major barrier to international trade in India are, export subsidies, standards of
labelling, testing and certification.
Existing level of Foreign Direct Investment
As per Pradhan, 2017, Industrial policy and promotion department foreign direct
investment of India was at 12.75 billion $ which denotes increasing ease and norms of Indian
government over FDI plan and polices. In accordance with exchange and investment in 2018
April to June it is identified that service sector of India has the highest equity inflow which is
2.43 billion US $. It was analysed that the maximum inflow was from Mauritius that is 1.49
billion US $ followed with Singapore with 6.52 US $. However, the exchange management
objectives of India are focused on maintaining appropriate level of reserve of foreign exchange
with the motive of managing stability in export and important and currency exchange rate.
Apart from this, in 2018 June Foreign direct investment approved appeal of Idea from
telecommunication department which was with the motive of merging with Vodafone with the
aim of making Idea and Vodafone largest tele communication operation of India (FOREIGN
DIRECT INVESTMENT (FDI), 2018). This merger application with international telecom
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operation reflects growth in and increase FDI which depicts increase investment opportunities in
India which make it as emerging market with regard to other competitor countries. On other
hand, Singh, 2018, argued that departments of Economic affairs which is regulated by Indian
government, it is identified that government closed three FDI for international investment which
was worth Rs 24. 56 crore.
Summary and recommendation
The country analysis of India reflected growth of India economy with regard to its
technology and economic factors. It is analysed that India is considered as emerging market of
globe because of its natural resources, politically stable factors, exchange rate and endowment
factors which aid the region in attaining competitive advantage over emerging economies like
china, turkey, Russia, etc. From the study it has been summarized that India is considered as
supportive economy of globe and which reflects remarkable environment for managing
increasing return on internation investment. The expansion of various tech giants and
multinational compares in India is another influential factor which denotes its productivity and
growth and development in modern competitive era. However, on the basis of country, some
recommendation can be made to boost internal investment in India which are as follows:
 Permitting foreign direct investment is the best way to promote and support international
investment in India. Allowing FDI in India completely which promote exchange and will
help in boosting growth opportunities via import and export (Bekhet and Al-Smadi,
2015). This will also assist country in managing flow of natural resources which will
helps in maintaining balance of reserve.
 Enabling separate place in economy for expansion on international business sin India will
also help in encouraging investment and managing growth of country in comparison to
other emerging market like China, Turkey, Russia, etc.
 Organising trade expo in specific region of India is another opportunity of the country to
increase investment because in this the economist and export will be able to directly
interact with internal investors by making them aware about improvement and supportive
condition of India like cheap labour, skilled IT labours force, technological software and
use of natural resources.
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SECTION 3: CONCLUSION
The assessment outlined country analysis from where it is determined that India is
emerging market and has opportunities for international investors for gaining positive returns.
From the analysis it is articulated that GDP of India economy has remarked its suss by increasing
up to 7 % and still there is chance of increase by .4 %. Further, from discussion natural resources
and endowment factors it is summarised that the country has availability of leap and skilled
labourer and is known as 2nd largest employer after India. Hence, the analysis concluded by
outlining recommendation which can boost international investment in India.
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REFERENCES
Books and Journals
Bekhet, H.A. and Al-Smadi, R.W., 2015. Determinants of Jordanian foreign direct investment
inflows: Bounds testing approach. Economic Modelling. 46. pp.27-35.
Hoekman, B. and Shepherd, B., 2017. Services productivity, trade policy and manufacturing
exports. The World Economy. 40(3). pp.499-516.
Hopewell, K., 2015. Different paths to power: The rise of Brazil, India and China at the World
Trade Organization. Review of International Political Economy. 22(2). pp.311-338.
Pradhan, J.P., 2017. Emerging multinationals: A comparison of Chinese and Indian outward
foreign direct investment. Institutions and Economies. pp.113-148.
Pradhan, J.P., 2017. Emerging multinationals: A comparison of Chinese and Indian outward
foreign direct investment. Institutions and Economies. pp.113-148.
Sridhar, R. and et.al., 2016. A Political, Economic, Social, Technological, Legal and
Environmental (PESTLE) approach for assessment of coastal zone management practice
in India. International Review of Public Administration. 21(3). pp.216-232.
Tiewsoh, L.S., Sivek, M. and Jirásek, J., 2017. Traditional energy resources in India (coal, crude
oil, natural gas): A review. Energy Sources, Part B: Economics, Planning, and
Policy. 12(2). pp.110-118.
Online
FOREIGN DIRECT INVESTMENT (FDI). 2018. [Online]. Available through:
<https://www.ibef.org/economy/foreign-direct-investment.aspx>.
Ghai, K, K., 2016. Exchange Rate System in India: Objectives and Reforms. [Online]. Available
through: <http://www.yourarticlelibrary.com/essay/foreign-trade-essay/exchange-rate-
system-in-india-objectives-and-reforms/40406>.
Indian Foreign Exchange Market: Recent developments and the road ahead. 2014. [Online].
Available through: <https://www.indiainfoline.com/article/news-top-story/indian-
foreign-exchange-market-recent-developments-and-the-road-ahead-
114100700185_1.html>.
Singh, H., 2018. What India needs to do to attract more foreign direct investment. [Online].
Available through: <https://economictimes.indiatimes.com/blogs/et-commentary/what-
india-needs-to-do-to-attract-more-foreign-direct-investment/>.
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